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The Citizen
3 days ago
- Business
- The Citizen
How to be a savvier saver and investor
National Savings Month is an initiative to promote healthier financial habits and encourage households to save. National Savings Month is almost over. Some consumers learned how to save, but how many know how to be a savvier saver and investor? 'In essence, the intention is to foster a culture where South Africans can become more financially disciplined, leading to greater financial independence. To foster this culture, South Africans must learn that small actions in savings and investments can make a big difference in their lives. 'There are positive changes in the financial advice industry that consumers can capitalise on to do this,' Steven Amey, head of Intermediated distribution at Ashburton Investments, says. ALSO READ: South Africans experiencing less financial stress, but still under pressure — survey Why healthier savings and investment habits are necessary According to Eighty20 XDS Credit Stress Report 2025 for the first quarter of 2025, South Africans rely too much on debt. Household debt reached an outstanding R2.56 trillion in the first quarter of 2025, up 2.1% from the previous quarter. 'The most concerning aspect of this is the number of overdue loans. A staggering 34.8% of all loans are in arrears, the first time in two years this number increased,' Amey warns. 'Consumers are battling to pay for rent, food and the basic necessities of life, yet we continue to spend on items that fall outside these categories, evidenced in the 'Mass Credit Market', representing the majority of the South African population. 'Interestingly, approximately 325 000 people started using credit for the first time, in the form of retail loans. Overdue payments on credit cards in the mass credit market increased and 53% are in default, unable to pay an instalment. On average, South Africans spend close to 30% of their income on loans.' ALSO READ: Survey shows how economic distress erodes South Africans' savings culture Statistics show we are not savvier savers Amey points out that according to TransUnion's South Africa Industry Insights Report for the first quarter, the growth in originations for new credit cards at 30.7% compared to the previous year far outstripped growth for other consumer credit products. He says this is cause for concern. How do you change to build better savings habits? Amey says there are a number of good habits South Africans can embrace to improve your financial well-being, including: reviewing your household budget to find where you can save; becoming financially self-disciplined because small changes in spending can make a big difference; and starting to save immediately without hesitation to reap the benefits of compound interest over time. Amey says to start with, you must separate your needs from your wants and rather use your hard-earned salary to pay for the essentials and save the rest or spoil yourself. 'We tend to overreach and spend more than we can afford. The statistics demonstrate this. 'Why extend yourself for short-term happiness when the inevitable of having to return your item or have it repossessed a few months later will cause greater embarrassment?' ALSO READ: How can you save when you use 75% of your income to pay debts? Options to be savvier savers and investors are available He says savings and investment options in South Africa are also evolving in South Africa. 'While learning to save is critical, turning savings into long-term investments is where real wealth is built. To do this, you must be aware of changes in the financial industry that can be leveraged for your benefit. 'The investment value chain dramatically improved for the regular retail investor over the past two decades. We moved from having an investment industry that largely sold financial solutions on the back of attractive commissions to one that has become well-regulated, respected and led by financial professionals that truly care about their clients' financial well-being.' Amey says it is interesting to note that the financial services industry splintered into various advisory groups, each with their own unique value proposition. Many advisors elected to join networks of advisors, ordinarily supported by large established industry providers which assist advisors with regulatory compliance and enable them to offer sound financial advice and a host of additional ancillary services to enhance their value proposition to their clients. In addition, large life and banking advisory divisions offer advisors many of the benefits of a network, with access to additional systems and services these large life and banking channels developed over decades. And then there are the larger, more established independent financial advisory practices that retained their total independence, leveraging the resources they accumulated over years of entrepreneurial practice, Amey says. ALSO READ: Five money mistakes that seem smart, but could cost you a lot later How qualified financial advisers can help us be savvier savers and investors 'Today's Qualified Independent Financial Advisors (IFAs) can render sound holistic financial advice and are regarded as the modern day 'sherpa'. Their role is to prepare and help you navigate the financial complexities of life. 'Holistic financial planning is the epitome, where there is no longer a focus on a single need but a comprehensive analysis, incorporating all aspects of financial planning, from budgeting to cash-flow analysis, tax planning, investment planning and estate planning. 'Once all of this and more is compiled into an understandable and executable financial strategy, financial products, platforms and solutions can be recommended to enable your unique plan.' Amey also warns that while robo-advisor platforms are prevalent and tempting, they should be used only by more informed and astute investors. 'The need for financial advice from a qualified financial advisor remains as strong as ever despite these latest developments.' According to the March report of the Association for Savings and Investment South Africa (ASISA), there are a plethora of investment options available to investors. For instance, there are 1 884 unit trusts (100+ being passive or 'Smart Beta Funds'), commodity funds, hedge funds, structured products, private equity, venture capital funds, fine art, actively managed certificates (AMCs) and more to select from, all adding to the financial complexity investors are facing. 'This is why it is critical to get advice from a qualified financial advisor.' ALSO READ: Savings month: How to save like a millionaire – even if you are not one yet How discretionary fund managers can help us be better savers and investors Amy points out that one very important development is the recent steep growth in discretionary fund managers (DFMs) in South Africa. 'DFMs removed the burden of the advisor having to perform in-depth investment management due diligence and the complexity of having to compile detailed economic and asset management reports. 'Most DFMs have experienced teams, with sound investment processes and philosophies mastered over several years, for the benefit of the advisors they serve. In addition, many DFMs manage significant assets, which can enable them to negotiate reduced asset management fees on behalf of advisors.' He says the investment portfolios they compile may be personalised for the needs of certain financial planning practices or more generally to serve broader financial advisor needs. These portfolios usually comprise large and boutique active asset managers, as well as passive and smart beta investment strategies to reduce overall investment portfolio costs. Advisors then invest their clients' assets into these portfolios to achieve desired investment outcomes.' Amey says it is clear that many DFMs 'add significant value, segregating roles and responsibilities to ensure the advisors they partner with can focus on what they do best'. 'The savings and investment industry evolved significantly over the past two decades. If you want to change your financial fate you must tap into this opportunity. The way to do this is to partner with the highly skilled new generation of accredited financial advisors who lead from the front, acting as much needed financial sherpas for South Africans who want to build a better future.'
The Citizen
15-06-2025
- Business
- The Citizen
SAAF needs R414 million to refurbish Ramaphosa's presidential jet
The interior update will not occur in this contracting period due to a lack of funds. An airplane carrying President Cyril Ramaphosa arrives at Beijing Capital International Airport, ahead of the 2024 Summit of the Forum on China-Africa Cooperation yesterday. Picture: AFP Parliament continues to hear troubling reports about the impact of the South African National Defence Force's (SANDF) budget constraints, with the latest report affecting President Cyril Ramaphosa and his deputy, Paul Mashatile. The Joint Standing Committee on Defence received an update from Armscor on the status of the South African Air Force (SAAF) and South African Navy maintenance and acquisition contracts on Friday, and the outlook appears grim. Selekane Folo from Armscor informed the committee that there is a R7.7 billion shortfall to fund support contracts for the SAAF over a three-year period, amounting to a R2.56 billion shortfall per year. ALSO READ: Defence budget cuts 'impact Reserve Force capability' 'The lack of funding has been ongoing for a long period of time, and it has its consequences,' said Selekane. These include reduced fleet availability, with only the bare minimum of maintenance being done; essential upgrades are postponed; higher maintenance costs are incurred due to supporting obsolete subsystems; and a large recovery cost is required to catch up on maintenance. Maintenance of Ramaphosa's jet This has also affected the VVIP fleet, which has been unable to undergo maintenance due to a lack of funds. The contract for the maintenance and support of Ramaphosa's Boeing 737 Aircraft, contracted to Jet Aviation AG in Switzerland (the design authority for the aircraft's interior), costs R440 million and was placed from July 1, 2023, to June 30, 2026. The contract for local support for maintenance, contracted to Dentec, costs R60 million and was placed on 1 December 2024 and ends 30 June 2026. ALSO READ: Over 2 700 'old' SANDF personnel released, but new recruits will depend on funding 'What we need as a requirement to maintain the Boeing Business Jet (BBJ) is about R500 million, and currently, we are sitting with a shortfall of R414.9 million,' Selekane told the committee. 'There is an upcoming four-year maintenance that happens for about three months, but we can confirm as Armscor that the Air Force and we are trying to source funds to make sure that the check is well-funded. 'The major four-year maintenance is due in October 2025. This requires good planning and a scope of work from SAAF at least six months in advance. The scope of work is still to be finalised.' SAAF: No interior maintenance The interior update will also not occur in this contracting period due to a lack of funds. 'The BBJ is not fully funded as there are insufficient funds to conduct various refurbishments and upgrades in the aircraft, e.g Cabin refurbishment. Funds are only utilised for the C-Check and normal day-to-day maintenance.' The Falcon fleet used by the deputy resident has not been spared either. The contract for the maintenance and support of the Falcon fleet, as well as its associated ground support and test equipment, is with Execujet MRO Services and was in effect from 1 March 2023, to 28 February 2026. The value of the contract is R252.4 million, but the SAAF needs R142.1 million to maintain the fleet. READ NEXT: SANDF budget constraints: Not enough soldiers at the border, reserves getting older
IOL News
13-06-2025
- Business
- IOL News
Armscor discloses alarming R7. 7 billion budget shortfall impacting South African Air Force maintenance
President Cyril Ramaphosa walking from the presidential jet, which, Armscor says, apparently requires R414 million in funding to be fully maintained. Image: GCIS Armscor, the arms procurement agency for the South African Defence Department, has revealed to Parliament that a staggering budget shortfall of more than R7 billion threatens the maintenance of the South African Air Force (SAAF) aircraft fleet. This happens as the acquisition and maintenance contracts have not been adequately funded for a long time. In a presentation to the Joint Standing Committee on Defence on the status of maintenance contracts of the SAAF aircraft fleet, Armscor said all SAAF platforms for contracting were in place. It also said that the majority of the contracts have spent 100% of their planned cash flow. 'There is a shortfall of approximately R7,7 billion to fund the current fleet. If you average it in terms of an annual basis, it is R2.56 billion, and this implies that the SAAF maintenance is currently at two to three times less than we are currently funded.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ MPs also heard that the implications of the budget shortfall were a reduced fleet availability, and only bare minimum maintenance was done, with essential upgrades postponed, leading to high maintenance costs. 'Armscor is confined to place on-demand contracts. Only the very bare minimum is contracted, and this does not guarantee aircraft availability.' In a clear show of the seriousness of the budget shortfall, the Boeing Business Jet, which President Cyril Ramaphosa travels in, requires R414 million in funding to be fully maintained. The three Falcon aircraft, which Deputy President Paul Mashatile travels in, require R142m to be fully maintained. The 11 Rooivalk combat support helicopters require a massive R2 billion, while the 36 Oryx transport helicopters need R2bn. Armscor said the Rooivalk maintenance contract was R2.5bn, but it was funded to the tune of R469m. Earlier, the Acting Executive Manager for the Dockyard Justice, Ramakokovhu, told the MPs that the Naval Dockyard has 286 technical personnel and suffers from deteriorating infrastructure. 'The 286 technical skills are not sufficient to support the maintenance and upkeep of the South African Navy,' said Ramakokovhu, adding that they required a staff complement of 4,000. The refit of submarine SAS Isandlwana was contracted to a service provider and was conducted in Durban. The ANC MP Pitso Noe said the issue of funding was central to the challenges at Armscor. Noe asked that Defence Minister Angie Motshekga give an account on all the lack of funding and its impact. 'I consider it so serious to the functioning of Armscor and the defence of the country,' he said. DA MP Nicholas Gotsell said it was shocking that Armscor spent R10m as disclosed by Motshekga in a response to a parliamentary question on the board when there was a R7.7 budget shortfall for the air force. 'It is very worrying. We won't accept the lavish boardroom spending while the aircraft are on the verge of being mothballed and the Rooivalk helicopter is barely operational,' Gotsell. 'I am really worried and concerned about the abuse of taxpayers' funds. Armscor can't justify the R10m on board perks when SANDF is forced to cut pilot training hours due lack of fuel and spares,' he said. DA MP Chris Hattingh said the presentations confirmed what they had suspected all along. 'We need to agree that without the reassessment of the defence review, it is impossible to determine what should be the priorities of spending in the limited budget of the Department of Defence,' Hattingh said. IFP MP Russel Cebekhulu said it was God's mercy that South Africa was not attacked from the outside. 'One is at pains with what has been presented before us, with lots of excuses for the failure of our defence equipment in the Navy and Air Force, not being in a workable state of the fleet,' Cebekhulu said. ANC MP Malusi Gigaba said what they heard was expression of a horror story. Gigaba echoed Hattingh's sentiments on the need for a defence review and the need to address the ongoing challenges. 'If we don't deal with these things, we are to remain in the situation we are in. We can't be the one who laments the ongoing decay that we are seeing without taking firm decisions,' he said. Motshekga said the defence force was in constant discussion on how to deal with the challenges. 'We acknowledge the challenges, and there are efforts on the part of Armscor to get things right,' she said. Motshekga also said they were planning to hold a meeting to plan on cost-saving measures.
